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Just three weeks after KNDS and Leonardo broke off negotiations on their co-operation, Leonardo and Rheinmetall signed a memorandum of understanding (MoU) on 2 July 2024 to establish a new 50:50 joint venture aimed at developing a European industrial and technological approach in the field of land defence systems.

According to a Rheinmetall statement, the first objective is the industrial development and subsequent commercialisation of two vehicles: an Italian main battle tank (MBT) and the Lynx platform as an armoured infantry combat system (AICS) as part of the combat system programmes for the Italian Army.

The MoU is subject to prior approval by the relevant regulatory authorities, including the European Commission and the respective national competition authorities.

“Together we want to set new standards and open the door for a new generation of state-of-the-art combat vehicles in and for Europe,” said Armin Papperger, CEO of Rheinmetall. “We are thus addressing the Italian market as well as other partner nations in need of modernisation in the field of combat systems.”

“The technological and industrial synergies between Leonardo and Rheinmetall are a unique opportunity to develop state-of-the-art main battle tanks and infantry vehicles. We see this agreement as a fundamental contribution to the creation of a common European defence space,” added Roberto Cingolani, CEO of Leonardo.

The future joint venture, based in Italy, will act as prime contractor and system integrator for the two Italian programmes (MBT and AICS) and define the roadmap for Leonardo’s potential participation in the future European Main Ground Combat System (MGCS), according to Rheinmetall. The company stated that mission systems, electronics and weapon integration are to be developed and produced by Leonardo in line with the Italian customer’s requirements as part of the MBT and AICS programmes. In the event of Italian participation in the MGCS programme, the technologies will also form a possible basis for the development of the future European MBT and variants intended for export.

Final assembly lines, homologation tests, delivery activities and logistical support are to be carried out in Italy, with 60% of the work to be carried out there. The Italian share of work is said to have been a criterion for breaking off negotiations with KNDS.

At Eurosatory 2024 Rheinmetall presented the Panther KF 51 U with an unmanned turret, which could become the starting point for an MBT development for Italy. (Photo: Gerhard Heiming)

Italy has a requirement for around 200 MBTs and 350 infantry fighting vehicles (IFVs) (see ESuT report). The value of a possible order from Italy is estimated by insiders at EUR 20 billion, according to Handelsblatt. The amount also includes the procurement of support platforms such as armoured engineer vehicles, bridgelaying vehicles and armoured recovery vehicles, as well as logistical support for operations. In February 2024 it was announced that the first prototypes of a new Italian MBT are expected from 2026. The procurement period was specified as 2027 to 2037 (see ESuT report).

With the newly developed Panther MBT and the new Lynx IFV, Rheinmetall has the appropriate basic technology on which to build in both programmes. Both vehicles are Rheinmetall’s own developments, with a modular design that allows components from other manufacturers to be integrated as required by the customer. Rheinmetall has gained experience with the Boxer multi-role armoured vehicle in Australia and the UK, the Lynx IFV in Hungary and the Challenger 3 MBT in the UK.

The Lynx IFV is in production. After Rheinmetall manufactured the first 46 combat vehicles on its own production line as agreed and trained Hungarian employees of the Rheinmetall Hungary joint venture, the first Lynx IFV was completed in Hungary in December 2023 at Rheinmetall’s AFV production, development and test facility in Zalaegerszeg.

The Evo version of the Panther KF 51 MBT, with a manned turret and 120 mm gun with automatic loader, is also being developed for series production in Zalaegerszeg. At Eurosatory 2024 Rheinmetall presented the Panther KF 51 U with an unmanned turret and automatically loaded 130 mm cannon.

One of the Leonardo/Rheinmetall joint venture’s first tasks will be to select the vehicles as the starting point for development. There is not much time left until the delivery of demonstrators in 2026.

A Lynx KF 41 IFV like the first one produced in Hungary could soon be deployed by the Italian Army. (Photo: Rheinmetall)